Marketing of Services

Part A
1) Explain the seven elements of the services marketing mix as addressed in this case? Give
examples of each “P”
i) Product – The product in this case is the dentistry service being offered by Dr. Beckett and team. Dr.
Beckett realizes the importance of providing a superior service to her patients and opted to be a better
quality provider rather than low cost provider. Being the only dentist she had ensured her staff is well
trained on the procedures they would carry out. An internal mission also stated to provide superior
dentistry to the patients.

ii) Pricing – The pricing as discussed in this case refers to the cost of the dentistry service received by the
patients. The price of the service offered by Dr. Beckett was relatively higher than Health Maintenance
Organizations (HMOs), which usually had a cap on prices for various services based on what their
doctors would charge the most for different procedures. The higher price charged by Dr. Beckett was
due to the superior service provided by her. Though price plays an important role in attracting customer,
Dr. Beckett preferred to differentiate her service on the basis of quality and not cost.

iii) Place – The place in service marketing mix refers to the place chosen to conduct the service business.
In this case Dr. Beckett had her new office in Northern California itself, where she had practiced before
and had already created a reputation for herself, and was designed by an architect hired for that specific
job. The decision of moving to a new office was taken keeping in mind the affect on the quality of
service that would be offered by the staff in a cramped office. The new office building was designed to
be more appealing and pleasing to the customers with lots of light and space. Though the cost of hiring
an architect and designing an own office building was high, Dr. Beckett felt it would be a crucial factor in
differentiating her service.

iv) Promotion – The healthcare industry is United States was seeing a change with a movement aimed at
reducing costs to insurance companies and patients with managed health care through HMOs, even
during such a critical time of change Dr. Beckett decided to not spend any money on Advertising but
rather focused on providing quality service to the patients and thereby promoting her business with
positive word of mouth.

v) People – People refers to the employees of a service firm. Dr. Beckett had 7 employees who were
separated by job function into front office and back office. 2 employees were in the front office team
and the remaining were involved in providing and assisting in dental services. The staff believed in
providing quality care and worked as part of a larger team. Dr. Beckett had recognized that patients’
perceptions of quality comes from their interaction with the staff and not from their technical skills.
Employees were encouraged to attend classes and workshops to update their skills and in an instance
good business bonuses were also given. Dr. Beckett had created a transparent environment for her staff
where ideas to serve patients better were encouraged and also revenue details were shared, this in turn
motivated the staff to work harder towards the goal of providing quality care. Dr. Beckett maintained a
friendly relationship with her employees and this reflected in their performance.

vi) Process – Dr. Beckett hired the services of a consultant and all the services such as billing, ordering,
lab work and patient treatment were redesigned. Focus was on standardizing routine procedures to
reduce errors and ensure a consistent customer experience. All the process changes like ensuring a
customer does not wait from more than 20 minutes, allotting specific timelines for each procedure,
keeping the patients informed of any probable delays, working as a team and supporting in staffs
absence, use of state of the art computerized machinery and educating patients about various
procedures were focused at serving the patients better.

vii) Physical Evidence – The addition of an element of delight or personal touch to make the customer
feel good about the service is what Physical evidence in marketing mix talks about. Dr. Beckett’s new
office had modern furniture and the walls were painted in different colours, live plants and flowers were
abundant and wall art was common, classical music played in the background and the patients also had
headphones available with wide variety of music. The office also selection of current magazines and
newspapers and hot beverages with a window in every room to allows the patients to watch birds
eating at the feeders. The ambience was so created to distract the customer from the pain.

2) Explain how Dr. Beckett and her staff educate the patients about the service they are
receiving? Is it done adequately? Explain what else could they have done?
a) Education regarding the service that is being provided to patients by Dr. Beckett and her team is done
through educational films which are played in the conference room about the different dental
procedures and also with the use of literature that would provide information to the requestors on the
next steps that need to be followed to maximize the benefits of their treatments. It was also made
mandatory for all new patients to undergo an initial exam so that Dr. Beckett could do a needs
assessment and educate them about the service. This she believed would give an indication to patients
that her service was superior to others. Apart from this Dr. Beckett believed that building a relationship
with the patients is a significant contributor to the quality of the service being offered. She stuck by her
ideology of providing a superior service even when she came across negative comments, knowing that
patients will have to get their dental work done anyway. Dr. Beckett and her team also displayed
messages which helped in communicating to the customers about the intention of providing quality
service to cooperative patients.

b) Yes, education regarding the service provided has been done adequately and the results are visible in
terms 3 to 4 months of waiting period for a routine cleaning and exam.

c) In a modern world with maximum patients having online presence, maintaining an online portal or
having pages created on various social media tools would help her educate prospective clients and
existing ones about the services she and her team offers. The same could be verified and warranted for
by her clients who are appreciative of her service, in the form of reviews on these social media pages.
3) What supplementary services are being offered by them? What methods and ways have
been used by them to enhance the service delivery?
a) Apart from dental care services Dr. Beckett and her team also offered certain supplementary services
ranging from a relaxed and hassle free booking and rescheduling of appointments, ensuring a minimal
wait time when given an appointment, accepting cancellations, keeping the customers informed of any
probable delays, educating the patients about the procedures through films and literature, providing an
ambience which would distract the customers form the pain and irritation of dental problems,
complimentary beverages and entertainment, fun area for children so they don’t find a visit to a dentist
scary as it may otherwise seem and also by maintaining the relationship through after procedure service
in terms of providing gifts bags and suggestions of things to follow to get the best out of the procedure.

b) To enhance service delivery the customer has been placed at the heart of the things in this case, Dr.
Beckett and her team provides least importance on promotion through advertising and by competing
through reduced prices but instead focus on the overall customer experience and satisfaction. Team
work, transparency in management and reward for hard work motivates the employees and thereby
contributes to better customer experience. A targeted market segment of white collar workers and
professionals helped the business in tailor making process to suit the needs of this segment.
Convenience of booking appointments, billing and use of advanced technology to standardize
procedures again ensured in consistent customer experience.

Part B
1) What was the state of affairs in LUX before the transformation – in terms of service quality,
brand image and financial performance? Was there any need to undertake any major change?
i) LUX before the transformation was known as Naiade Resorts Limited and suffered from in many
aspects of service quality, brand image and finances. The details of the same are below:

a) In terms of service quality the hotel was associated with providing core importance to grandeur
and formal service with no enthusiasm being displayed by the staff. The guests’ needs were not
completely met as there was a rigidity in terms of offering only luxury services. Extravagant
pomp and flair without much substance was widespread whereas clients preferred informal and
personalized service.
b) In terms of brand image Naiade (LUX) resorts like other luxury resorts was associated with
providing stiff upper lipped service and stuffy opulence.
c) In terms of finances the resort chain was in doldrums as most of the properties were owned and
this was highly capital extensive. Due to the global economic crisis which affected tourism
industry severely during the period the resort chain was almost at the verge of going bankrupt
and depended heavily on capital from shareholders.

ii) Yes, there was a need to undertake a major change to turn around all the shortcomings. There was a
need to change the ideology from owning hotels to managing hotels which would help them be service
experts while reducing the burden on capital and making it more flexible. There was a requirement to
train the staff and rebrand as a group, which provides authentic experiences to its clients in a lighter and
brighter way without compromising on the upscale sensibilities.

2. What were the main factors that contributed to LUX* Resort’s successful service revolution?
The main factors that contributed to LUX resorts successful service revolution are discussed below:

i) The change in ideology from owning hotels to managing hotels which would help them be
service experts while reducing the burden on capital and making it more flexible.
ii) Breaking the rigidity around being a typical luxury resort and offering extravagant but vague
services to offering informal and personalized services with a simplistic touch of each
destinations particular culture and history.
iii) Introduction of Chief quality assurance and innovation officer roles to overlook the delivery
of quality service, while constantly looking at innovating existing processes and properties
and also improving staff behavior.
iv) Trainings to enable team members to achieve new service standards
v) Introduction of incentive schemes for team members based on customer satisfaction and
resort ratings on online travel agencies, which motivated employees to offer better service.
vi) Introduction of new tools by tying up with third party agencies to track customer experience
instantaneously on daily basis which helped in understanding the areas of shortcomings on
a first hand basis and fix it immediately.
vii) Offering professional hotel management services to owners of other resorts resulted in
increased profits.
viii) Encouraging innovation ideas from employees to understand better ways to serve clients
ix) Introduction of quality assurance manual to be followed across group resorts a great
customer experience
x) Constant push to improve service standards and introduction of LUX Shining Hospitality
standards

3. What next additional important steps do you think LUX* can take, to cement its new strong
service culture and to continue its innovativeness?
The next steps that LUX can take to cement its new strong service in culture and continue its
innovativeness are:

i) Introduce surveys and take feedback from the employees about the work culture through
start, stop and continue analysis. Endorsing the hotel chain as a great place to work can also
attract new clients.
ii) Use new technologies such as virtual reality to promote the resorts or provide a trailer of
what is awaiting the customers. This could be very helpful in creating a desire among the
folks to stay at the group resorts.
iii) Social media is an effective tool in reaching out to new customers, advertising on social
media will ensure new client base is created.
iv) Maldives, Mauritius being the key locations of the groups resorts are famous destinations
for destination weddings and honeymoons tying up with wedding planners will help in
promoting resorts.
v) Frequent staff trainings and evaluation to maintain the LUX Shining Hospitality Standards.